Editor's Note

Trust, Not Price, Will Drive Bioheat Market
By Tom Bryan | January 01, 2008
Around this time each year, we address biodiesel-blended heating oil. Our perennial review of this topic-Bioheat-reminds readers of the potential that this still-marginal market for biodiesel holds. This month's cover story, "True Calling" by Biodiesel Magazine Senior Staff Writer Ron Kotrba, is particularly compelling because it prompts us, if indirectly, to consider the real possibility of a 1 billion-gallon-per-year market for biodiesel as a component of the distillates used for home heating and power.

The story points out that if only 5 percent of the 10 billion gallons of heating oil consumed annually in the United States was replaced with biodiesel, this would open up a 500 MMgy market for biodiesel. Double biodiesel content to 10 percent, which is well within current acceptable thresholds, and we're looking at a 1 billion-gallon market. Double it again, and well, you get the point. What's more, however, is that new peripheral applications for heating fuel, including combined heating, air conditioning and power generation systems for single-family homes, raises the bar even higher. That's just in the United States. At press time, a bill was introduced in Canada's Parliament that would require 2 percent average renewable content in the nation's heating oil by 2012.

The North American heating oil market isn't exactly booming, however. In the United States, only 7.5 percent of homes burn oil for heat, and more than 80 percent of them are in the Northeast and central Atlantic states. Heating oil, while efficient, isn't "green," and it's less convenient and more expensive than natural gas because delivered fuel is well above $3 per gallon right now. For these and other reasons, heating oil has a negligible share of the nation's new construction market. The question is: Can its reputation be rescued by biodiesel?

Heating oil advocacy groups and fuel distributors bill heating oil, especially when blended with biodiesel, as clean, safe and affordable. With broader applications emerging for electricity generation and air conditioning, Bioheat could win a place alongside other green heating and power sources such as geothermal and solar power. For that to happen, however, consumers must be convinced that Bioheat is clean, safe and reliable. We know it's clean; burning biodiesel-blended heating oil results in fewer emissions from nitrogen oxides and particulate matter. We know it's safe; blending biodiesel into heating oil raises the flash point of the fuel, making accidents more unlikely than they already are. As for reliability, perhaps the pending acceptance of B5 (or higher blends) in the ASTM heating oil spec, D 396, will start to ensure that operational issues with Bioheat are rare and unacceptable. Lock in those three selling points, and a 1 billion-gallon market is very possible.

Tom Bryan
Editorial Director
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